Chimney Canyon
Logan County and Weld County, Colorado
Summary | Leasehold | Base Map | Stratigraphic Cross Section | Structure Cross Section
Chimney Canyon Leasehold (PDF - 211KB)
EXECUTIVE SUMMARY
The Three Crown acreage in the Chimney Canyon Prospect is being sold for $75 an acre with an 80% NRI. The term on the leases is five years with an option to renew for an additional five years. The prospect encompasses 8,953.98 gross acres and 4,897.6772 net acres.
OVERVIEW
The Three Crown Petroleum Chimney Canyon Prospect has the potential to provide production from sands in both the D and J intervals in the Dakota Group. The thickness and expected net pay of the sands vary from place to place, but one or more of the sands seem to be present in each nearby well.
Nearby wells have produced in excess of 5 million barrels of oil. Even old wells (1960's vintage) are still producing. Drilling in the neighborhood is still going on with completions in both the Dakota D and J sands. Approximately 90% of the production in the Denver-Julesburg Basin is from the Dakota sands.
The Chimney Canyon area has been producing since the 1950's but recent drilling indicates that there is still a significant amount of hydrocarbons remaining in the area. Some of the wells that are currently producing (figure 2) have been producing for 20 or more years, but still have production levels that are commercially viable. A well one mile to the north, the Walsh Long Unit #72, has produced over 5.8 million barrels of oil from the Dakota D sand. The Brown Govt. #1, tucked up to the acreage, has produced 32,000 barrels of oil from the Dakota J sand.
INTRODUCTION
The Chimney Canyon Prospect is located across the boundary of Weld and Logan counties, Colorado, just south of the Nebraska state line (figure 1). The prospect is within the Denver-Julesburg Basin, northeast of the giant Wattenberg gas field. Production in the area primarily comes from the Dakota sands, either the D or J, or both.
The Wattenberg Field is in the deepest part of the basin and is considered an excellent example of a Basin Center Gas Accumulation. Although the field has traditionally produced gas from the Dakota sands, in the past few years the targets have been expanded to include oil and gas from the Niobrara and Codell above the Dakota. Old wells are being recompleted in the Niobrara and Codell and infill drilling has been approved for most of the field to the point where there is a well every 32 acres. The field has produced about 2.8 trillion cubic feet of natural gas and is expected to produce up to 5.2 trillion cubic feet. Wells drilled in the Wattenberg are usually deeper than 8,000 ft., while wells in the Chimney Canyon Prospect area are around 6,000 ft.
The Denver-Julesburg Basin has produced about 12.5 trillion cubic feet of gas. The primary stratigraphic horizons that produce throughout the basin are the Dakota D and J sands, the Niobrara fine-grained carbonates and the Codell sand. The wells in the immediate area around the Chimney Canyon Prospect have traditionally produced oil from the D and J sands. Approximately 90% of the production in the Denver-Julesburg Basin is from the Dakota sands.
The Chimney Canyon area has been producing since the 1950's but recent drilling indicates that there is still a significant amount of hydrocarbons remaining in the area. Some of the wells that are currently producing (figure 2) have been producing for 20 or more years, but still have production levels that are commercially viable.
GEOLOGY
Figure 2 shows the wells that have recorded production around the prospect acreage. The wells with a heavy green circle are currently producing, the rest have produced sometime in the past. The blue line marks the four well cross section shown in Figures 3 and 4. The producing sands are often separate sand bodies, so wells that have been producing for years from one sand may leave a nearby sand that is separate, is still at original pressure levels and available for exploitation.
After a well is drilled, measurements are taken with tools that indicate the physical properties of the rocks and, possibly, if they contain oil or gas. The display of these measurements is called wireline logs and is displayed as curves along depth. Some of the measurements give an indication of the quality of the sand, others indicate if the sand is full of water or oil and gas. These logs can be displayed as groups of wells called cross sections and represent the rocks.
Figure 3 is a SW-NE structural cross section that shows how, in general, the target horizons get shallower to the northeast. The fact that there is no structural closure right at the acreage can be worrying but, as mentioned above, the target sands are often isolated and can trap oil and gas on their updip edges. The Dakota sands were usually deposited in nearshore locations, such as barrier islands. These sands are usually longer in one direction than the other. If the sand length is oriented along a structural contour, then the sand can be a good trap.
Figure 4 is a stratigraphic cross section using the same wells as in figure 3. Stratigraphic means that a chosen log marker is level along the cross section, which takes structure out of the image. This display is useful for comparing the relative thicknesses of the target sands. This cross section has a larger vertical exaggeration, which shows the quality of the sands.
The well marked as the section 10 well of the cross section is closest to the acreage (see figure 2) and produces from the Dakota D sand. The section shows a thicker interval between the D and J markers at this well. With modern completion techniques, this well might also have been able to produce from the J sand, which is well represented. Other wells in the section produce from one or another sand in the J interval or from both the D and J sands. The well has produced 33,000 BO and 9 million cubic feet of gas since 1974.
Chimney Canyon Base Map (PDF - 2.73MB)
Chimney Canyon Stratigraphic Cross Section (PDF - 362KB)